Propertymark is urging that any action taken to control letting fees must take into consideration the financial effects it will have on landlords and letting agents.
Ciara Fergurson, Member of the Legislative Assembly (MLA) for Foyle, has consulted ahead of plans to introduce a Private Member’s Bill on stopping unfair fees letting agents charge tenants in Northern Ireland.
The Bill intends to guarantee renters do not incur unreasonable costs so that housing can be more accessible and affordable for tenants.
A consultation ran from March until May to seek clarity on the fees tenants were most subject to and what both agents and tenants assumed were fair.
Propertymark’s policy and campaigns team alongside property agents and Northern Ireland member executives met with Ciara Fergurson in person at Stormont to discuss her plans and provide direct feedback from agents working in Northern Ireland.
Propertymark says that while its members understand that financial pressures affect tenants, the professional body is concerned that if letting agents cannot charge for services that incur a cost on their business, they will find alternative means of recouping those losses. This could then result in letting agents increasing their fees to landlords who are likely to pass the costs on to tenants in the form of higher rents.
The professional body wants to ensure that evidenced costs to letting agents can be recovered. There are many services tenants ask for and must pay for because of the cost incurred by the agent. Replacing missing keys and amending contracts are examples of legitimate costs. If agents cannot recover these costs as they occur, every tenant faces a possible rent increase or a reduction in the quality of service an agent can provide.
Additionally, the Propertymark thinks that the central focus of any legislation should be on enhancing transparency and clarifying existing rules as opposed to a general ban on all fees. The tenant must have a clear understanding that they would have to pay extra fees alongside rents and deposits, which would then allow them to make more informed choices, stopping unpredicted costs and illegal charges, without thwarting agents from recovering legitimate business costs.
Finally, there must be better enforcement to produce a level playing field within the private rented sector. Without such a mechanism, the ban could create a system where responsible agents are unable to recover their genuine costs while some continue to charge unreasonable fees. There is always a concern that when tenants report fees that they fear losing their home or would experience prolonged and expensive legal battles.
Henry Griffith, policy and campaigns officer at Propertymark, said: “There is currently considerable inconsistency with how letting fees are charged in Northern Ireland. While the outcome of Paul Loughran vs Piney Rentals Limited confirmed that a tenant cannot be charged letting fees at the start or renewal of a tenancy where the tenant is being charged for services that were carried out on behalf of the landlord, we are aware that many agents continue to charge these fees. We therefore welcome the opportunity to legislate further, to provide the additional clarity. However, the Northern Ireland Assembly must be careful not to introduce a broad ban on fees that would lead to an increase in rents. Failing to take this into account would risk the legislation being unable to achieve its aims.”
Victoria Pinkerton, ARLA Propertymark executive for Northern Ireland, added: “Propertymark had a productive meeting with Ciara Fergurson MLA regarding her Private Member’s Bill on stopping unfair fees letting agents charge tenants in Northern Ireland. While we agree that the way letting fees are charged in Northern Ireland causes widespread confusion, there needs to be more clarification to prevent a surge in rents as a result of a general ban on fees, which would result in the legislation producing unintended consequences for both tenants and landlords. We look forward to playing an integral part on how this legislation will develop further to enhance the private rental market in Northern Ireland.”
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